Skip to main content

tv   Nightly Business Report  PBS  July 9, 2013 6:30pm-7:01pm PDT

6:30 pm
this is "nightly business report" with tyler mathisen and susie gharib brought to you by -- >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort. >> turning the page, a day after borns and noble ceo quit, the question remains, can the big box book seller survive and will amazon eventually rule the world of retail? >> own versus rent. it's an age-ol' debate which shopping for a home but will mortgage rates push potential
6:31 pm
buyers into the hands of land boards. >> will the tighter requirements make them safer? all that and more tonight on "nightly business report" for tuesday, july 9th. good evening everyone. a new chapter for barnes & noble today but how that story plays out is still unwritten. investors are betting on a happy ending pushing up by 5% today. they were reacting on news the ceo is out and the possibility the big retailer might break up and spin off the nook division. they out lived brick and mortar competitors like borders and walden books. what is next for the chain and can it survive? >> reporter: three years ago, barnes & noble made a bet on it's nook e reader bring income a new ceo william lynch to ignite the business. but the nook never caught fire losing $475 million last year
6:32 pm
and now william lidge is the former ceo of barns and noble. and the company's problems are bigger than just the nook division. sales did drop 34% in the most recent quarter, but sales in the physical stores and website also decreased by 10%. even if barnes & noble gepts rid of it's nook business, the outlook for the company as a stand alone retailer is hazy. amazon and other retailers are tough competition in the book business as people read on kindles and ipads. over the past five years sales at u.s. bookstores have fallen by nearly 3% but the analyst isn't dismissing barnes & noble's retail presence yet saying sales struggled but believes the retailer meets a demand. >> i go in there. take my kids in there to look at games, kids stuff, toys. it's a great store with a lot of traffic. the college bookstore business
6:33 pm
has a lot of value. >> i'm old-school fashioned. i like the feel of a book. >> i love the portability of a kindle or ipad. i like reading wherever i go. >> at barnes & noble we come with the kids to play up starps to play in the kids part. >> reporter: there will always be people that want to go to a bookstore and browse before buying, but the question for barnes & noble is will there be enough people doing that to keep the stores a live? for "nightly business report" i'm courtney regan. joining us now to talk more about the nation's changing tail landscape is mr. feldman. good to have you with us. >> thank you. >> let's talk first about barns and noble. can it survive, will it survive and what must it do to survive? >> well, i think it can survive if it creates an engaging experience. people like to go to the
6:34 pm
bookstor bookstore. people want to browse. amazon isn't good for browsing. amazon is good for buying and having something shipped but how do you walk into the book storm or go to the website and browse around? it's a different experience for the bookstore. for all brick and mortar retail, there is a reason for it and a reason to exist and to drive people into the stores. >> joe, i'm with you. i like to browse and touch and feel and all of that but, you know, amazon is so dominant in the retail space. there was a story in time magazine not long ago with the headline will amazon take over the world? it sounds like an exaggeration but sounds like they are. can anybody top what amazon is doing? >> amazon is doing a phenomenal job in categories, books, music, electronics but why couldn't walmart out amazon.
6:35 pm
walmart has thousands of stores, logistics-based company that sales stuff like amazon. why can't they leverage that need? the customer wants to pick up the goods in the store that day, shiped to their house, however they buy that item, walmart can provide it. amazon is trying to open more distribution centers for same-day delivery. you also get service, private label at stores. there is other reasons to go to the store beyond getting the item delivered to your house. >> you raise an interesting point there, joe, and i begin to think of apple and the way samsung has come to them. they made a good run. somebody will try and compete and effectively, eventually with amazon. let me turn to the big box format, which is really barnes & noble's thing. do they have a real estate problem in the same way lots of analysts believe best buy has or
6:36 pm
had a real estate problem? stores that are too big, too costly and have too many people in them? >> i do think there is an issue on that front, that the stores are quite large. they do, you know -- generally they are in very good locations, though. that's the one big strength barnes & noble does have. they have prime location. they don't have difficulty to get out of stores but the forum factor hasn't changed. the forum factor of the tv changed, smaller, thinner, you don't need as much space but maybe for books you don't want to house as many, but there are other things to do, whether it's games, toys, there is other -- the caves within the stores. there is ways to use the space. >> there is no question this whole business model is changing and influx, but look out a couple of years, who will make it, who will not make it? i know macy's and nordstrom are
6:37 pm
spending millions of dollars to have a site and lots of other retailers, but who makes it and doesn't? >> i think walmart makes it. i think home depot and lows is really not at risk from the internet. i think best buy makes it. i think best buy will make a good go and make a lot of stock. nordstrom, macy's, some players are investigating a lot now. they also offer good service within the stores. they offer didn't products. they offer private label in some cases. i think those are ways the big brick and mortar need to compete. >> they have to stand for something, that's my basic bottom line. thank you very much. on wall street, stocks rose today on investor hopes this earning season will be okay. specifically, the they reacted to those better than expected quarterly earnings and revenues from alcoa last night. stocks moved higher and by the
6:38 pm
close, the nasdaq rose 19 and the s&p 500 added nearly 12 points and just 17 points away from the all-time closing high. the yields on the ten-year at 2.64% today. rising interest rates scared investors and flow for money for bond funds. pinco suffered an out flow of $14.5 billion in june, the largest one-month ex dis since recordkeeping began. host of that money, nearly $10 million came out of the return fund. it lost more than 4% of it's value so far this year. research in motion officially changed it's name to blackberry at the annual shareholders meeting today. but that wasn't the only big change at the struggling smart phone maker. two long-time bored members announced they won't seek reelection and ceo hynes said
6:39 pm
he's open to partnerships. not surprising given disappointing sales of the hand sets this came out this spring. shares are down 19% so far this year but today rose almost 1%. the nation's largest supermarket chain did shopping today. krogers is buying harris teeter for $14 billion in cash. give it a total now of 2100 supermarkets nationwide. shares of kroger up more than 2.5% today. more good news about housing, foreclosures declined in may from the same month a year ago while some houses also dropped. that news lifted shares of home builder stocks today. the big winner, dr horton up 7.5%. while shares of toll brothers and kb homes rose more than 6%.
6:40 pm
we'll look whether rising mortgage rates are turning buyers into renters. the labor department says the miss of hiring by u.s. company was higher in may. report also showed that advertised job openings in may increased by a fraction from a month before. but a small business owner's group sees things a little differently. the national federation of independent business reports that a measure of optimism by small business owners declined in june, following two straight months of gains. more owners reported raising prices and some plan to take on new hires, but many owners say demand for the products and services is still weak nncht market focus tonight, fedex takes off. shares jumped on reports that william yacktman is conten plating a buy. there was no comment from fedex
6:41 pm
or yacktman. they traded at eight times the normal volume before closing at $103.18, that's up more than 4 1/3%. pressure on ib m's growth markets may weaken some of ibms earnings and cash flow. shares lost almost 2% to close at $191.30, essentially flat for year to date. a licensing deal with cbs adding csi new york and other titles to next flix offerings and extending access to older shows. netflix closed at $247.38, up almost 200% in a year. by contrast intuitive surgical tumbled 16% after the company issued a gloomy earnings and sales warning that lead to downgrades today.
6:42 pm
the maker reports the second quarter numbers next thursday. shared touched a low closing at $419 and change. health management associates jumped on a report that this hospital operator is attracting takeover attention from other hospital companies. they are in disspeed with glen view capital. shares have more than doubled in a year and today's news put shares higher on triple volume to $16.75. alaska air said traffic and revenue soared in june and announced plans to increase baggage and ticket change fees later this year. the stock took flight up 7.5% to $55.93. smokers could get a break when new obamacare measures go into effect. a computer glitch will limit penalties they can charge smokers for coverage. the penalties could be up to 50% of the total premium but will
6:43 pm
reject some of the highest levees and administration says a fix could take at least a year. a powerful u.s. sen tomorrow wa -- senator wants to create a system, legislation that would let state and city governments turn their pension plans over to private insurance companies. under his plan, employers would pay a premium each year to a state licensed insurer. workers would then receive fixed amount annuity payments after they retire. hatch says his overhaul would ease financial strains on state and local governments, and public workers would get the type of benefits they want. and coming up, the most powerful financial regulators in the country want the biggest banks in the nation to meet tighter requirements, but will the new rules make them safer? but first a look at some of the stocks hitting all-time highs today.
6:44 pm
grease is the word, the struggling greek government is close to reaching a deal with lenders to get the next big bailout payment by monday. but first, the finance administration will decide if they made enough public sector job cuts to receive another loan of more than $3 billion. while the international fund helps grease rebound it doesn't have good news for the global economy today. the imf cut the global growth outlook for this year and next. hampton pearson has the details. >> reporter: top e conn miconom predicting smaller global growth
6:45 pm
this year and next. china is leading the way among developing countries seeing a slowdown in economic growth. >> this means that the focus of policies would increasingly need to turn to boosting potential out ward growth in the case of china to achieving a more sustainable and balanced growth. >> reporter: the imf forecasts global growth from 3.1% and 3. % is the 2014 forecast. the u.s. economy is weaker. the imf pegs u.s. great at 1.7% this year and 2.7% in 2014. down 2/10ths of a percent. how long will the sequester last and ben bernanke to taper the stimulus. >> going forward, we think this
6:46 pm
was very much repricing episode and we expect to decrease, maybe not back to the levels of a few months ago but to decrease relative to the highs of the recent past. but one cannot rule further attacks of nerves along the way. >> reporter: leading economists and market watchers say it's not just volatility that has all eyes on the feds. >> if the tapering causes slowing or economic activity or increases in interest rates that would have adverse effects where it might force the hand of other central banks. >> reporter: japan and great britain are two bright spots getting upward provisions to their growth forecast. as far as solutions to sluggish global growth, the imf wants the u.s. and other wealthy nations to adopt more pro-growth policies and bring down the debt. for "nightly business report," i'm hampton pearson in
6:47 pm
washington. >> despite that forecast, there is good news about american boarers. more americans are able to pay down debt. late payments on u.s. credit cards fell to a 22 -year low in the first quarter of this year. if you pay off those cards and are saving more money in a credit union be careful. credit unions have been raising fees on things like atm withdrawals and more. the reason, credit unions are looking to offset a decline in overdraft fees. federal regulators are proposing strict new rules for the nation's biggest banks. the federal reserve, the fdic and office of the comptroller are all teaming up to make sure banks increase the ratio of equity to loans from the current 3% to 5% and set aside higher reserves for deposit holding units. kayla joins us no we more on what this means for the nation's biggest lenders.
6:48 pm
you know, kayla, people are always worried to all of the financial crisis, are the banks safe? do these new rules mean we can sit back and say the banks are not safer? >> it would appear to be so, suzy. this is one of the regulations that the policy makers have been eluding to for several years now. it limits the amount banks can borrow to fund activities, especially short-term debt. so if push comes to shove, they won't have as much debt outstanding. there won't be as many investors and also, banks will be able to fund activities from day to day. the hope is, by eliminating some of that risk in the system, they will make the banking system safer. >> this means they need basically more capital. they can't take as much risk. what in turn sdoes that mean? if i'm a stockholder, can they grow as fast as they otherwise would have been able to? >> i don't think so, tyler. utility stock, we heard that
6:49 pm
mentioned but regulators want to make sure they won't be leverering up their balance sheet, ie borrowing more to reinvest capital and beef up returns and make the big profits they did before the crisis. they want them to have a steady earning stream, even if that's a lower earning stream. they will buy back stock and issue dividends but if you like utility stocks, that's where the ban banks are heading. >> what does this mean for loans? we're hearing how difficult it is to get a mortgage, car loans, what does it mean now? >> lending going up entirely during the crisis, it's taken along time for banks to bounce back. regulators say one of the leading voices behind this registration said that what happened in 2008, 2009, 2010 was a lending implosion. loans dried up almost entirely and that because you're now
6:50 pm
having a bigger capital base, some banks won't have to stop lending, even though the growth might be a little slower. >> that's good news. thanks for coming by. kayla. >> thank you. washington is not only tightening up the oversight of banks to prevent another financial crisis but going after the raiding agencies. a judge cleared the way to let the federal government pursue the $5 billion civil suit that accuses the s&p ratings declouding investors by deflating the ratings of risky sec kurpties before the financial crisis. if you've been contacted by a collection agency, you might like this story. a debt collection agency that federal regulators accused of harassing and abusing people behind on payments has agreed to pay $3.2 million self penalty and ordered to stop calling debt tors several times a day. the penalty against expert global solutions, the world's
6:51 pm
largest is the biggest ever leveed against a third-party debt collector. two giants of the financial world, both long-time friends are involved in a big lawsuit against one another. one of billionaire ronald opearlman is suing michael milkin for fraud. remember him? clark exec sievutives say they deceived. pearlman says the lawsuit is only business, nothing personal. still ahead on the program, is your car a popular target for thieves? we have a list of the automobiles most likely to be stolen. before we get to that, let's get a check on how stocks, bonds and commodities faired today.
6:52 pm
the ford f-250 is a terrific vehicle for contract tomorrows and people towing boats and mobile homes but that's the problem. it is also now the new favorite among carp thieves specifically, it's the ford f-250 super duty crew cab with four-wheel drive the bad guys want. it has seven times the normal climbs compared to the average vehicle and the first time in ten years that the cadillac escalade was not in the top spot. apparently, my prius is safe. log on to our website nbr.com for the complete list. we told you that foreclosures continue to drop and with housing prices recovering and confidence returning, the thought was that more renters would become buyers but mortgage rates closing in on
6:53 pm
5% may turn that theory on it's head. diana olick has more. >> reporter: in cities across america, apartment buildings are going up. rental demand took off after the housing crash, some called it rental nation as homeownership went from 69% in 2004 to 65% to the beginning of this year. the reasons were simple, financing and fear. >> i can't afford to buy a house now. >> i'm scared in part due to the fact that my father and mother had a lot of problems with mortgage. >> reporter: just as housing was starting to recover and more renters were considering buying, mortgage rates jumped over a pull percentage point in the past two months. that has some potential buyers more nervous than they were. >> we're actually looking for a place to buy, and right now it seems that the -- from what we understand, the mortgage market
6:54 pm
was topping. >> reporter: while mortgage rates are throwing a wrench in the recovery, they are breathing new life into the apartment sector. >> mortgage rates going up by 50 to 100 basis points takes out the ability for people to afford to buy a home. >> reporter: they are benefitting the people that develop new apartments like avalon bay and camden property trust. >> it curtails development because it's more expensive for developers. they have the capital. >> reporter: apartment rents rose in the second quarter of this year up over 2% from a year ago according to a new report. rent growth has been slowing but largely due to weak income growth and these latest numbers were from before the mortgage rate jump. rising mortgage rates have cut the average buyer's purchasing power by over 10% while rates are historically low, credit is tight and getting the low right can be tough. not to mention consumers memory's are short and after years of record-low rates, the
6:55 pm
thought of getting a mortgage of around 5% could be a deal breaker. >> so how much would you pay for an original and functioning apple 1 computer? not that much apparently. an online only auction for the rare working computer with the original manuel ended today with a winning bid on nearly $390,000, which was less than christi's auction house forecast and far off a previous auction that fetched $671,000 for a different apple 1 desktop model. finally tonight, if you've ever thought tv had gone to the dogs, it turns out you have been barking up the right tree. after a successful test run in san diego, dog tv will be unleashed to direct tv subscribers nationwide. for $5 a month, the channel area shows for your dog to watch, 3 to 6-minute clips to get man's
6:56 pm
best friend stimulated or make him relaxed or expose him to situations your dog may find himself in like riding in a car with a toddler -- >> dog tv unleashed. >> that's "nightly business report" for us. i'm susie gharib thanks for watching. >> thanks for me, as well, i'm tyler mathisen. have a great everything. see you tomorrow night. "nightly business report" has been brought to you by -- >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river crews, exploring the world in comfort.
6:57 pm
6:58 pm
6:59 pm
7:00 pm
narrator: explore new worlds and new ideas through programs like this. made available for everyone through contributions to your pbs station from viewers like you. thank you. matthew morrison: he was the third generation in a family of theatrical producers. his grandfather oscar the first in opera, his father, willy, in vaudeville, his uncle arthur in operetta. oscar the second was blessed by genes and genius. he wrote the lyrics for over a thousand songs and the books for 45 operettas and musicals, many of them made into films, and still being performed today. no one changed theater history more than oscar hammerstein ii.
left
right